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House of Representatives
Subcommittee on Benefits,
Committee on Veterans' Affairs,
Washington, DC.

    The subcommittee met, pursuant to call, at 10 a.m., in room 334, Cannon House Office Building, Hon. Jack Quinn (chairman of the subcommittee) presiding.
    Present: Representatives Quinn, Hayworth, LaHood, Filner, Evans, Mascara, Reyes.


    Mr. QUINN. Good morning. The subcommittee will come to order and begin the hearing today on operations within the Compensation and Pension Service using the GPRA Principles. We'll also hear some testimony today on the VBA's processing of Persian Gulf claims and hear remarks as well about the Administration's legislative proposal to limit the VA's liability for smoking-related illnesses.
    The Compensation and Pension Program distributes about $16 billion dollars annually to veterans and their survivors. Title 38 states that the mission of the compensation program is to provide monthly payments for disability resulting from personal injury or disease contracted in the line of duty, or for aggravation of a preexisting injury suffered, or a disease contracted in the line of duty in the active military, naval, or air service.
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    At the end of last fiscal year, there were about 2.6 million veterans receiving compensation and 305,000 survivors receiving Dependency Indemnity and Compensation and death compensation.
    Section 1155 describes the method of determining these payments as a ''schedule of reductions in earning capacity...based, as far as practicable, upon the average impairments of earning capacity resulting from such injuries in civil occupations.''
    The current rating schedule provides monthly payments ranging from $94 to $1,924, plus a wide array of supplemental benefits that may raise payments above the $5,000 mark for our most severely disabled veterans.
    Title 38 is less clear about the purpose of the pension program. However, it is clear that Congress intended the program to provide non-service connected, totally disabled wartime veterans a minimum level of income—about $8,450 for single veterans. There were over 372,000 veterans receiving pension and about 200,000 survivors receiving death pension in September of 1996. Last year, the average pension program benefit was about $4,225. Clearly, as all of us know, nobody in the program is getting rich.
    Judging from the VA's budget submission, as well as the meetings between the VA and Committee staff to discuss the Department's progress towards compliance with the Results Act, it's clear that the VBA has spent considerable effort on the project. And today we will hear about additional progress, I'm certain.
    We are also planning to review the VA's handling of Persian Gulf claims. There appears to be considerable interest in decentralizing Persian Gulf claims processing. And all of us are interested in what the stakeholders have to say on this issue.
    I want to point out that each of the VSO witnesses today will criticize the way the VA has handled these claims. I also hope that each of them will be prepared to go beyond the criticism of the centralized processing system that the VA appears to be backing away from and address the more substantive issues like consistency, timeliness, management, and direction.
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    We want to all be assured that the VA now has a handle on that processing. It is unfortunate that the processing of these Persian Gulf claims has been characterized by what appears to be a lack of strategic direction. At least that's the characterization.
    There also appears to be a lack of training, some poor outreach, inconsistent development of evidence, and some failures in duty to assist. Therefore, I will ask the GAO to review processing, with an emphasis on duty to assist and development of Persian Gulf claims, and report their findings back to the subcommittee as soon as possible.
    There continues to be a strong perception that the DOD and the intelligence agencies are not telling everything they know. We want to get to the bottom of this, and we'll hold as many hearings as necessary to solve this problem.
    Trust is the glue that holds this society together, and I'm deeply disturbed about the continuing revelations regarding chemical weapons incidents.
    I'd like to ask the VA to provide a list of all projects they are sponsoring concerning Persian Gulf Illness—the funding for each, a short description of the project and the name of the principle researcher. In addition, I would appreciate a strategic plan describing how all of the research programs fit together to solve this issue.
    To borrow a Results Act phrase, ''compensation is not the desired outcome.'' What we want are healthy veterans and their families, and research is critical to that effort.
    To round out today's hearing, we have asked our witnesses to discuss the VA's proposed legislation on not compensating certain veterans for smoking-related illnesses. VA has sent a draft bill to the Congress that will place significant restrictions on who may be compensated for these types of illnesses.
    We're sure that this is not the last airing on the subject, and we look forward to an open discussion.
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    Having outlined at least three different areas for us to hear testimony today, I'll turn to Mr. Filner, our ranking member on the subcommittee, for his opening remarks, and remind all of us that we have a full plate here this morning—a wide array of witnesses and folks that will bring us some discussion to all three areas.
    Mr. Filner.

    [The prepared statement of Chairman Quinn appears on p. 41.]


    Mr. FILNER. Thank you, Mr. Chairman, and good morning. It's so nice to see you at 8:30 in the morning. Put facetious in the remarks. I also would like to stress a few points after the Chairman's opening remarks.
    I look forward to the discussion regarding VA's proposal to move the Persian Gulf War claims from the four Area Processing Offices to all the VA regional offices. This is a difficult issue. It will have profound effects on the lives of thousands of Persian Gulf War veterans and deserves, of course, very serious and forthright discussion.
    In that discussion, I would like to know how VA reached its original decision to establish the adjudication responsibility for these claims in the four processing offices in spite of objections from Congress and veterans' service organizations at the time.
    What actions did the VA take to ensure that the four APO's could do their jobs efficiently to guarantee their success? What additional staff and computer assistance were provided to these regional offices?
    From our experience with educational—when the educational service designated four regional processing centers to adjudicate Montgomery GI Bill claims, these regional offices initially were not given the support they obviously needed to fulfill their responsibilities.
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    But within a year, the necessary assets were provided and it seems like the education RPC's have worked out reasonably well. Apparently the Persian Gulf APO's have not been given the tools and training necessary to meet their challenges, and I find that very, very disturbing.
    And I want to know how and why this circumstance has developed. I'm additionally very skeptical, I guess would be the word, by assertions in your testimony today that the very complex problem of redistributing the thousands of Persian Gulf War claims to regional offices across the country can be accomplished by early June.
    I'd like to know how you proposed to accomplish this because that's not described in your statement.
    These are, I think, very important issues. I hope we'll get some satisfactory issues this morning because, as the Chairman said, in all issues surrounding Persian Gulf War veterans, we deserve candid, honest answers from the VA.
    I noticed I had not heard the Chairman's opening remarks before he gave them. I had not read them earlier. But you provided, Mr. Chairman, a list of things that you would like to have answers to. I thought that was a very good list.
    And I would like to add, if you don't mind, in your questions about research and the programs—the research and questions involved with civilian—the civilians who have—now claiming that they have gotten Persian Gulf War Illness or some similar thing and would like a—some reasonable and candid, I think, approach to their problems.
    When I was in my district this weekend, I had some particularly chilling meeting with some people who apparently, through casual contact with military during—military folks involved in the war, have come down with very similar, if not exactly the same, symptoms and illness and are regarded even with more skepticism by the military and apparently the VA then than originally was given to the—to our military people.
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    That is, it's taken some time to break through and get a serious examination of Persian Gulf War Illness amongst the military, and now we have at least a reasonable period of—presumptive period to deal with it. But it looks like the civilian situation might be equally as chilling and equally as—equal reluctance of the military and the VA to even look at it seriously.
    So I would like to add that to your——

    [The prepared statement of Congressman Filner appears on p. 44.]

    Mr. QUINN. Absolutely. To the extent that the—you know, the VA can get involved in those civilians, I'd be happy to have that added to the list.
    Thanks for the suggestion.
    Before we hear testimony, Mr. Reyes, any opening remarks?
    Mr. REYES. I don't have any.
    Mr. QUINN. Mr. Hayworth?
    Mr. HAYWORTH. No.
    Mr. QUINN. Mr. LaHood?
    Mr. LAHOOD. Nothing.
    Mr. QUINN. So you've left Filner and me to do it all, huh? I'll tell you.
    Thanks, gentlemen.
    Our first witness is Ms. Kristine Moffitt, Director of the VA Compensation and Pension Service. She's joined by Assistant General Counsel John Thompson, and the VBA's Chief Financial Officer, Bob Gardner.
    As we begin, Bob, we want to thank you and your staff for the way that you've dealt with the committee and the subcommittee on the Results Act. We appreciate it very much. And it's a chance for me publicly to say to—at least for me and on behalf of the subcommittee, say thanks for the briefing we held earlier this year over at your place where we were for a few hours. But it seemed like just a few seconds, it was so, you know, spellbinding.
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    Ms. Moffitt, please begin.


    Ms. MOFFITT. Thank you.
    Mr. Chairman, members of the subcommittee, I'm pleased to be here to discuss implementation of GPRA, the adjudication of Persian Gulf claims, and VA's proposed legislation on tobacco-related disabilities.
    With me, as you noted, are Mr. Jack Thompson, Assistant General Counsel; and Mr. Bob Gardner, Director of VBA's Office of Resource Management.
    The Government Performance Results Act is the primary vehicle though which the Compensation and Pension Service developed a business plan that was combined with the business plans of the other services within VBA into one comprehensive VBA business plan.
    For fiscal year 1998, the VBA business plan was used as our annual budget request. We are now in the early stages of the fiscal year 1999 business plan process. The Compensation and Pension Service's fiscal year 1998 business plan was based upon our business processing reengineering project.
    This established a vision of how compensation and pension claims will occur by the year 2002. We have developed a number of goals, performance objectives, and performance measures for fiscal year 1998.
    For '98, we plan to achieve and maintain a 92 percent accuracy rate. Also for fiscal year 1998, we will reduce the time required to process claims. For example, our goal for original disability compensation claims is 106 days. We'll reduce the time required to prepare an appeal and reduce the remand rate.
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    We will improve communication and outreach and be responsive to our customers' needs. We plan to train all employees in their positions in order to maintain a highly skilled, motivated, and adaptable work force. And we will reduce the overall operating costs to ensure best value for the taxpayer's dollar.
    Our visions and goals correlate directly with those of VBA and the Department. We designed an ambitious plan. Our goals are set high enough to inspire improvement, but not so high as to guarantee failure.
    With regard to the Persian Gulf claims—in November 1994, the President signed Public Law 103–446 which authorized us to compensate Persian Gulf veterans for chronic disabilities resulting from undiagnosed illnesses. In February of '95, we published regulations to implement the statute.
    By early 1996, after nearly a year's experience with undiagnosed illness claims, we reviewed a sampling of these claims denied because the disabilities first appeared after the two year presumptive period.
    We found several instances where recent medical examination or lay statements had not been requested. We also found instances of incorrect information being provided in our Persian Gulf tracking system.
    On the basis of these findings, in July 1996, we instructed our four Area Processing Offices to undertake a readjudication of some 10,700 cases identified in our tracking system. The purpose of the readjudication was to ensure that proper weight was being accorded to lay evidence and to be sure that the information in our tracking system was correct.
    In our opinion, both of these goals are being met. As of April, we have completed readjudication on 4,966 cases. We awarded additional grants of service connection in 683 cases, 157 of those for undiagnosed illnesses.
    The overall grant rate for service connection for undiagnosed illnesses has risen from 5 percent to 7 percent. We believe that this increase is due to more complete development for lay evidence and more thorough analysis of the lay evidence together with medical evidence.
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    On April 29, 1997, we published an interim final rule to implement the Secretary's decision to expand the presumptive period for undiagnosed illnesses through December 31, 2001. Because of this change, we have begun a further review of claims that were denied because of the two year presumptive period.
    We expect a significant number of additional grants for undiagnosed illnesses. In December 1992, VBA consolidated the adjudication of Persian Gulf environmental hazard claims in the Louisville regional office.
    Because of the unexpected high volume of cases, we redistributed them to four Area Processing Offices in October 1994. We also consolidated the undiagnosed illness claims in these four stations.
    The purpose of the consolidation was to concentrate expertise in rating the complex issues and dedicate the resources to expeditious claims processing. However, the additional work imposed on these four stations has had an adverse impact on the other areas of their claims processing.
    While they have given priority to Persian Gulf cases, a large amount, if not all, of their routine rating work has been transferred to other stations for processing. The percentage of claims pending over 6 months at the Area Processing Offices during the first 6 months of fiscal year 1997 shows a higher rate of increase over 1996 than has been seen nationally.
    Therefore, in order to maintain overall claims processing efficiency, the Secretary just last night approved our recommendation that Persian Gulf claims be redistributed to the regional office of jurisdiction.
    In making this decision, the Secretary took into account the views of the veterans, the veterans' service organizations, and members of Congress who had expressed concerns about the specialization of Persian Gulf claims.
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    We will now initiate this redistribution and will instruct the regional offices to stop sending Persian Gulf claims to the Area Processing Offices while we plan the implementation. We will schedule training to assist the regional offices in processing these claims.
    These training sessions will focus on our experiences in developing and rating these cases that we have gained over the last 2 years. We believe that a transition from the Area Processing Offices to the regional offices will provide the customer-focused service that our veterans are asking for and will not adversely affect the quality improvements we have seen or the accuracy in updating our data base.
    Lastly, with regard to tobacco-related claims, as our General Counsel interprets the current law, direct service connection may be established for disability or death resulting from tobacco use during active service even if the disability or death did not occur until after service and after the expiration of any applicable presumptive period.
    We have about 4,250 such claims pending adjudication.
    In the 1990 Budget Reconciliation Act, Congress prohibited compensation for disabilities resulting from the abuse of alcohol or drugs. This action enhanced the integrity of our compensation program. In the same spirit, VA recently submitted proposed legislation to prohibit service connection due to tobacco use in service.
    However, it would not preclude service connection where the disease or injury appeared or was aggravated during active service or during the applicable presumptive period.
    Mr. Chairman, this concludes my statement. I will be happy to answer any questions.

    [The prepared statement of Ms. Moffitt appears on p. 61.]
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    Mr. QUINN. Thank you very much, Ms. Moffitt.
    We appreciate the fact that the ranking member of the full committee, Congressman Lane Evans, has joined us here this morning and wonder if Mr. Evans might have some opening remarks or comments to make at this time before we begin any questioning.
    Mr. EVANS. Thank you, Mr. Chairman. I'd just like to submit them for the record.
    Mr. QUINN. Without objection, so ordered.
    Mr. EVANS. Thank you.

    [The prepared statement of Congressman Evans appears on p. 46.]

    Mr. QUINN. Now we've got three areas that we're dealing with, so we're going to try to limit questions.
    Thanks for being brief, Ms. Moffitt. We appreciate that. There's probably some questions certainly that will be generated.
    I'd like to go to the Results Act portion first. You've talked about for 1998 some claims processing goals of being about 92 percent accurate and you talked about processing them in 106 days. We also know that there's been some cutbacks or at least some rearranging of staff at the same time.
    Can you talk for a minute or two about—first of all, when you talk about a 92 percent accuracy rate and about processing claims in 106 days or so for 1998, what has it been the last couple of years? Is that an increase? And the larger question, how do you propose to do that with less people?
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    Ms. MOFFITT. With regard to the accuracy, we plan to measure accuracy in 1998 in a different way than we have done historically. If you—for the future, we will take the number of cases processed correctly divided by the universe of cases reviewed to determine the accuracy rate.
    If you apply that math retroactively to the statistics we already have on hand and say well what is your accuracy rate right now, it is about 90 to 91 percent. So when we look to the future, we are hoping to improve our accuracy to 92 percent for 1998.
    With regard to the 106 days for timeliness, right now we stand at overall average of 133 days for original disability compensation claims. We expect over the next 18 months to drive that down to 106 days if at all possible.
    You asked how we will do that in the face of possibly some reductions in the work force. We are looking at overtime to assist in bringing that down, as well as some initiatives that we have under way that will assist us in doing a faster job of adjudicating original disability compensation claims.
    Notably, we are going to contract exams to the private sector and plan to do that initially at military bases where veterans are being discharged so that we can get an examination as well as a rating decision within a day or so of the time a service person is being discharged.
    That will help to improve our overall average time to complete.
    Mr. QUINN. And you haven't done contracting out of this type before?
    Ms. MOFFITT. No, sir.
    Mr. QUINN. Will you be comfortable—are you comfortable with the process of selecting those folks that will help you at regional places?
    Ms. MOFFITT. We have completed our statement of work. We have not gone on the street yet to find who those contractors will be. But I think that we have provided a very detailed plan of how that will occur.
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    Mr. QUINN. Okay. Thanks very much. I have some questions on the other part of your testimony, but I think we'll give the other members a chance.
    Mr. Filner.
    Mr. FILNER. Thank you, Mr. Quinn.
    Ms. Moffitt, you know we have worked together both in San Diego and in Washington, and I think you know I have the highest regard for you. Given that background, I was, let me just say, very disappointed in your testimony and let me tell you why.
    It seems to me that a number—and I'm going to read some of them to you. A number of criticisms of the way the system has operated up until this point have been made and are, I think, well known. And it doesn't look like you are recognizing these issues and dealing with them in a frank and open and honest way.
    If there are mistakes that were made, let's deal with them, admit them, and correct them. If these criticisms are not valid, let's deal with those. But you're acting as if nobody has been concerned or nobody has brought up problems with this thing from a human perspective and dealing with these very real issues of people's life and death matters.
    And I want to get it out of the bureaucratic language and this passive tense and this passive voice, and I want to talk about people; the people you serve and the people who work for you. People are either doing their job right or not. They are either doing it well or not.
    If they are making mistakes, somebody is responsible. And I get from the testimony on this whole Persian Gulf War from, you know, past hearings that we've had before the full committee in this everything is—well, it happened or, you know, the process—there's no individuals ever responsible for anything it seems in dealing with these issues.
    Let me just tell you some of the things—I'm new in this area. And let me tell you the things that I have heard or know about. And it just doesn't seem that you are dealing with these in any honest way.
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    Veterans have not been informed as to the evidence needed to support their claims. The VA has not requested evidence concerning the continuity of symptoms. Since the presumptive period was originally only 2 years and many veterans did not obtain a medical evaluation until after that time period, they were denied because the presumptive period was not long enough for them to get to the date of the first evaluation.
    And then the VA did not ask the veterans to submit lay evidence concerning the onset date of symptoms. In most cases, the VA examiner did not ask or record the date symptoms began. And since the veteran was not informed of the need to identify an onset date, they didn't do so.
    They were not notified by the VA of the change in the law allowing lay evidence and nonmedical indicators such as time lost from work that could be submitted as evidence of an undiagnosed condition so they didn't submit such information.
    The VA rating board did not request nonmedical evidence of undiagnosed conditions. The Persian Gulf registry was not used to assist in the development of claims. Although four specialized rating centers were established, no standard adjudication practices were developed and provided.
    Irregularities were noted with violation of the VA's duty to assist traditional due process requirements in basing medical conclusions on medical evidence. The only staff which received special training in the adjudication of Gulf War claims was the staff of the Phoenix processing office.
    I can go on. There's a list that has been—we've compiled based on both specific documentation and specific testimony, and it's as if this doesn't exist.
    I need you and the VA and the people to address this stuff in very specific ways and tell us what's being done to make sure that this treatment of our veterans does not continue and find—and if they're responsible people or processes, deal with them in an open way.
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    I mean, I just—let's talk with some emotion and some humanity as opposed to this bureaucratic language which doesn't get to the heart of it and doesn't show how we are concerned, the veterans themselves are concerned, and I'm sure the people who work for you are concerned.
    But let's get some emotion into this and correct the problems and take some responsibility for it.
    Ms. MOFFITT. Mr. Filner, I think in recognition of many of the problems that you listed there, that we did note that errors had been made and we took responsibility by asking for a readjudication of nearly 11,000 cases.
    We said that mistakes had been made in that the rating specialists and those people developing the claims were not fully aware of the uniqueness of this new legislation in that lay evidence needed to be fully developed and considered in the rating decision.
    And so that readjudication of 11,000 cases was in recognition of the errors that had been made.
    Mr. FILNER. Well, how did that happen? I mean, it sounds like a systemic—it doesn't sound like a mistake; it sounds like a systemic underestimation of the problem, a systemic casualness about the problem, a systemic—there's something going on wrong when you have that—if you're saying there are that many problems.
    Wouldn't you say that there's a serious situation here? I mean, who is responsible for that? I mean, is there—are there people involved that made wrong decisions? How did the system break down with that kind of problem?
    And again, everything isn't as passive—you know, well there were 11,867 or whatever errors. Who made the decision that led to that? How did we get to that situation? Because if you don't fix responsibility and if you don't take responsibility, why will these 11,000 be proven any—be fixed any better than the first time around?
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    Ms. MOFFITT. The readjudication of 11,000 cases was mandated by Jack Ross who was the acting Compensation and Pension Service Director at the time. As of November 1996, I take full responsibility for the actions with regard to Persian Gulf adjudications in the field.
    Mr. FILNER. Let me—my time is up, but I want to come back. Kris, you're not getting at what I'm trying to answer, and I'll try to rephrase it in a way that maybe you can come to grips with it.
    Mr. QUINN. Thank you, Mr. Filner.
    Mr. Hayworth.
    Mr. HAYWORTH. I thank the Chairman and Ms. Moffitt. Let me follow up on the comments of the ranking member in this regard. Because even as he mentioned some of the training being provided in Phoenix, I can offer cases to you and direct contact with many constituents that remain very concerned about Persian Gulf Syndrome.
    And with the help and leadership of our colleague on this committee, Mr. Buyer of Indiana, we held a forum in October of last year where many of these people came forward. It is in that light then that I need to ask, even in the midst of the readjudication of some 11,000 cases, are we seeing Persian Gulf vets still filing initial claims for undiagnosed illnesses?
    Ms. MOFFITT. Yes, sir; we are.
    Mr. HAYWORTH. Has the rate of that application declined or increased or remained steady?
    Ms. MOFFITT. It has remained fairly constant.
    Mr. HAYWORTH. Again, to follow up on my colleague from California's concerns, granted that even as you stand to take responsibility—and I don't mean to put words in the mouth of my colleague from California who is quite articulate and can speak for himself.
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    But to prevent future problems like this and to come to grips with the problems that we have today, and even mindful of time constraints here, as you assess the situation which you inherited, as you assess the discrepancies, the inconsistencies of treatment—as the Chairman said in his opening statement, the fact that it just seems that for many sectors we have not gotten the full story on this syndrome.
    What do you believe could have been done differently from the outset that would have avoided the problems we're seeing now?
    Ms. MOFFITT. I guess that if we could have looked at a wider range of cases earlier, we may have seen that there were—the areas of discrepancy that you all are mentioning have to do with, in most instances, the hasty adjudication of these claims.
    Had we looked at a broader spectrum of the sampling of cases earlier, we may have identified that earlier. What I mean by that is that this legislation asked that we look at lay evidence and consider it on an equal weight with medical evidence. That is not the criteria that has historically been used in weighing evidence in the past.
    As those claims were being adjudicated, had we had full knowledge that that concept had not really been fully understood by the rating specialists, we probably should have taken earlier action to correct it.
    But I applaud what Mr. Ross did in July of '96 to say even though the—we're not sure of the scope of the discrepancies, we will look at every single case and make sure that the veteran is given the opportunity to submit evidence from all sources, including lay evidence; and then we will make sure that we follow up on all leads to get that evidence.
    Mr. HAYWORTH. I know that we all share the notion that we certainly hope that our fighting men and women never have to bear the burden of battle again. I think all of us are unanimous in that concept.
    But God forbid, should there be a future conflict, as the VA deals with those veterans returning home from that conflict, do you think there should be a period of heightened examination?
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    And akin, indeed, almost to the after action reviews that so many branches of the military use in the wake of military action, should there be an intensive follow up, systematic, systemic plan for offering special scrutiny in the wake of a conflict—say a window from 18 months to 2 years to try and understand all the different maladies and situations that might develop, or has that already been adopted?
    Is that standard operating procedure for you folks?
    Ms. MOFFITT. Claims start to come in immediately in the aftermath of a conflict. What we need to do better is make sure that the people in the field are adequately trained to handle the cases that come realizing that medical science doesn't know, can't determine what the etiology of the illnesses are from the Persian Gulf.
    So when you try to either legislate or rate something that we really don't have a good handle on, sometimes it is the passage of time that allows for better decisions to be made about that.
    But as I talked about, what we expect in the reengineered process of the future is a highly trained work force that will have at its fingertips computer-based training that will very effectively teach them anything they need to know that is new with regard to rating practices.
    That is not something we have right now. But to look to the future and how things could be done differently, I think that is within our plan. And to give the people on the front line of the VA, those people making the decisions, adequate training up front so that they can make good decisions is how I would approach a future conflict.
    Mr. HAYWORTH. Thank you, ma'am.
    Thank you, Mr. Chairman.
    Mr. QUINN. Thank you, Mr. Hayworth.
    Mr. Reyes.
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    Mr. REYES. Thank you, Mr. Chairman.
    You know, Ms. Moffitt, I think one of the things that plays out in these hearings is that there's an overwhelming frustration on the part of not only members of Congress but people that have sought the services of the VA.
    I have an ongoing concern that I would like for you to speak to, and that is the national standardization in terms of the types of—or the kind of service that veterans receive across the country in the different regional offices.
    I think that in hearing your comments this morning about hasty adjudication and lack of training, I would go further and encourage that we sensitize people that provide these kind of services through the VA for our veterans should receive.
    And I say that because oftentimes we have—I don't know if it's a policy, I don't know if it's an attitude or what it is that the first thing we're looking for is a reason to deny a veteran a benefit.
    I mention that because, in my District where we have approximately 60,000 veterans, that is an overwhelming concern of theirs—that it's not so much people that are willing to help or trying to help or trying to determine how they can help, it's almost an endemic situation where they're trying to find a reason not to.
    And I mention that to you this morning because it's been raised to me and to other members of this committee as well as the full committee because we've heard this continuously. I would like to ask if you can tell us this morning how do you monitor the standardization of services throughout the country?
    What kind of institutional training program do you have to make sure that employees of the Department of Veterans Affairs that are working with veterans and that are making decisions and determinations about benefits that are provided for them—what kind of a system do you have in place that would give you a good grasp on any potential problem areas, any issues like the ones I've mentioned to you this morning?
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    Ms. MOFFITT. Well, first of all, our philosophy for dealing with claims is ''grant if you can and deny if you must.'' I regret that your constituents feel that that is not how we view our job in the field.
    With regard to standardization, GPRA looks at several areas in which we would measure our performance in outcomes to veterans—service to veterans. With regard to timeliness standardization, we look across the Nation to see if there—if claims are being processed timely.
    In instances where there are serious workload problems where claims are not being processed timely, we look to broker work to remedy that situation. With regard to accuracy, we look at a cross section of cases from each regional office and the lessons learned from those reviews we share with all regional offices to ensure accuracy in Persian Gulf claims as well as other claims.
    One of the tools we now have available to us with regard to standardized training is a national system for a satellite broadcast. This has fairly recently been brought online for us. And that allows us to provide standardized training to all decision makers in the field so that the policies and procedures to be employed by them in their daily work are coming from a single source that they all can hear.
    And as a matter of fact, that is the system that we plan to use to provide training to the regional offices who will take back the Persian Gulf cases on redistribution. We will use the satellite to give them standard policy procedures on how to work these claims based on our experience over the last 2 years.
    Mr. REYES. Is there a system in place in terms of—I don't know if it's a rating system or an evaluation system to determine the consistency of service regionally and maybe perhaps a comparative analysis, you know, countrywide or nationwide so that you can identify problem areas or pockets of—or perhaps offices that are not up to the standard, whatever the standard may be?
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    Ms. MOFFITT. GPRA envisions that, as we determine the performance measures, those will be passed on from the national level, to the area levels, to the regional office directors, down to the managers, as well as the individual decision makers.
    That is not in place now. But we do recognize that does need to be in place for an effective implementation of GPRA.
    Mr. REYES. Okay.
    Thank you, Mr. Chairman.
    Mr. QUINN. Mr. Evans.
    Thank you, Mr. Reyes.
    Mr. EVANS. Thank you, Mr. Chairman. Mr. Chairman, I want to thank you for holding this very important hearing. I associate myself with some of the comments made by both sides of the aisle here today with one exception. I don't think it's frustration anymore it's growing anger at what the VA's response has been to this whole situation.
    Based on the American Legion's testimony and VA documents, I believe VA has been remarkably passive in its efforts to obtain adequate and proper information from Persian Gulf veterans, so that it can process their claims.
    The VA, over the objections of veterans' service organizations and to some degree Congress, implemented a policy under which Persian Gulf claims would be adjudicated at four regional—or four Area Processing Offices.
    By July 1996, as we've talked about, the Compensation and Pension Service had to instruct the four APO's to take another look at nearly 11,000 Persian Gulf war veterans' claims because of the evidence that VA collected information related to these claims in a sloppy and incomplete manner.
    It has also been demonstrated that too many of these cases have been improperly entered in the VA's tracking system for Persian Gulf veterans' claims.
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    After fighting tooth and nail to establish the four APO's to adjudicate these claims, the VA is now saying 2 1/2 years later that it was wrong. What VA found is that the stakeholders, the veterans' service organizations, and Congress were right, and the 50-some VA regional offices should be adjudicating these claims.
    I just wonder, as Bob Filner has asked, where does the responsibility ultimately lie? Why did these four APO's fail? Was it because they weren't given adequate support to ensure their success?
    The VSOs assert that even with only four APO's, inconsistency of judgements regarding eligibility for compensation is a significant problem. Will this be a problem that will be resolved or at least exacerbated by decentralizing the Persian Gulf War claims through the regional offices?
    Ms. MOFFITT. We will continue, as we redistribute the cases to the regional offices, to review the work that is done and provide—continue to provide training and analysis of the inconsistencies to gain consistency.
    The decision to specialize the claims in the four Area Processing Offices was done to hopefully allow for quicker processing of Persian Gulf claims.
    When the workload was such that they could not handle that in the expeditious fashion that we would like them to and taking into account the 11,000 claims that we took responsibility to readjudicate, we determined that the workload itself was going to mean that Persian Gulf veterans' claims, if left at the four Area Processing Offices, would take many, many more months to complete.
    Mr. REYES. Well, we understand that.
    Ms. MOFFITT. With regard to the resources that they have, to the extent that their Area Directors were able to add resources, we have—we had four Area Processing Offices plus two additional offices working those cases. Some 56 rating specialists working full time on those cases.
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    That is just not enough resources to bring to the issue. But importantly, as you have mentioned, veterans want their cases handled locally. And especially if we can't handle them expeditiously, the longer they sit thousands of miles away where they are not able to, on a day to day basis, find out the status of those claims, that only exacerbates the problem.
    So veterans and their advocates have told the Secretary in town forums, have expressed to all of you, that they want those claims adjudicated locally. And in responding to that and the workload strains, I'm taking responsibility to move those cases back to the regional offices.
    Mr. EVANS. Of the four APO's, were there any that stood out as being particularly efficient and accurate in processing claims?
    Ms. MOFFITT. All of—to say the other way, I think definitely Nashville, because of the large numbers—they had some 45 percent of all Persian Gulf cases—struggled—has struggled the most to take care of that workload.
    But with regard to the other issues, I think basically they've all handled them about the same.
    Mr. EVANS. Are there any practices used by the APOs that did a good job, in this case Nashville, that could be applied to the RO's now processing Persian Gulf claims?
    Ms. MOFFITT. We plan to use the experiences of the APO's and use the rating specialists, the section chiefs, other managers to help train the regional offices as they get these cases back so that lessons learned will be passed on now to those rating specialists and managers at the other regional offices.
    Mr. EVANS. All right; thank you, Mr. Chairman.
    Mr. QUINN. Thank you, Mr. Evans.
    Second round. My question was the same, Lane, about going from area to regional and if that's going to create a problem.
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    Let me ask a straightforward question. You talked earlier about training to get this done. You just mentioned it in response to Mr. Evans' question. When and how long might that training take? When's it going to be done? Will it be ongoing?
    Ms. MOFFITT. We plan our first satellite broadcast for all of the decision makers in the field on May the 29th. It will be basically a two hour session to go over the principles of rating undiagnosed illnesses.
    On June the 2nd and 3rd, we plan to call in a representative from each RO to a central location for 2 days of training to go indepth into the issues. In addition, the regional offices have hearing officers who are subject matter experts with regard to these Persian Gulf claims insofar as when veterans filed an appeal and asked for a hearing, those cases went back to those regional offices.
    Those are the planned training sessions. Any other training that is necessary, either through nationwide conference calls, additional satellite broadcasts, Area training, we will undertake as we determine what the needs are of those regional offices.
    Mr. QUINN. But for right now you're looking at the first week in June?
    Ms. MOFFITT. Yes, sir.
    Mr. QUINN. Which would be only 2 or 3 weeks from now?
    Ms. MOFFITT. The first being actually May 29.
    Mr. QUINN. Okay.
    Ms. MOFFITT. And then in the first week in June.
    Mr. QUINN. And this is not a question, before I yield to Mr. Filner my time, but more of an observation. One of the things we've heard time after time, in hearings here and in other issues when it relates to veterans, is the fact that there's miscommunication or a lack of communication.
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    And I think this is going to be one of those areas where when we make the move back to the regional offices, not only the training that you just outlined is going to be critically important, but the communication that takes place. That's why the VSO's want the claims, I believe, back to the regional offices—for the reasons you just mentioned—want them closer, not 3,000 miles away.
    But communication will be a key. And I don't need an answer. I'm just saying for the record today that I hope we pay attention to that, as I know you're aware. But for me, it becomes more and more important every time we make a move like this and for some of the reasons we've already heard this morning.
    This frustration and almost anger with the Persian Gulf situation I think lies in the whole communication effort or lack thereof.
    Ms. MOFFITT. I agree with you, sir.
    Mr. QUINN. Thank you. I yield the balance of my time to Mr. Filner.
    Mr. FILNER. Thank you, Mr. Chairman.
    Kris, are you aware of a VA White Paper on Persian Gulf Development? I don't know if it was done internally or——
    Ms. MOFFITT. I'm not sure what you're referring to.
    Mr. FILNER. Okay, I have a document that's labeled VA White Paper, Persian Gulf Development, and it's signed—it's apparently an internal review of the whole processes and it was undertaken last year signed by D. Rice, PGDEV. I don't know what that means.
    Do you know what that means?
    Ms. MOFFITT. Dale Rice is a member of the Compensation and Pension Service.
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    Mr. FILNER. I mean, he outlined a whole series of problems based on internal review of the process which—I mean, I'll read you a couple of things, but just incredibly—I will say incompetent work to get—to give the veterans the knowledge of what they have to do to make the claims and what kind of evidence is suitable and the time frames that they have to do this.
    For example, ''evidence of continuity was not routinely requested.'' So if it's not requested, it's not provided; and therefore no evidence, and therefore claim denied because the folks involved from the VA's perspective did not give the assistance—there's a term that you use for that—do assistance or—duty to assist apparently was never—not never—was not done in a great number of cases.
    There was no proactive communication from the VA when the law changed. For example, as noted by—in this report, ''Public Law 103–446 established a use of nonmedical indicators, for example, to—for the diagnose—as indications.''
    And yet, those changes in the law were published in the Federal Register and not otherwise publicized, according to this report. Now most of us do not read the Federal Register, even the congresspeople.
    Mr. QUINN. Oh, I beg your pardon.
    Mr. FILNER. I'm sorry. My Chairman reads the Federal Register.
    But if you're not going—aside from the fact that it's so—you know, it's so ridiculously, you know, incomprehensible, you've got to translate what is going on into language that people can understand and act on, and apparently nothing was done in a general way for veterans to understand the change.
    And therefore, says this report, should that be considered an error on our part—that is, the VA's part—because—that the veterans were denied due process because they weren't told of the information?
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    In studying the Louisville APO, it was decided that there was no standard adjudication practices that were done. Now this goes on and on. I mean, it is extremely—very difficult to understand how such lack of standardization, lack of communication, lack of understanding of the issue was so widespread.
    And if you couldn't do the training that was necessary and the standardization and the communication at four offices, I agree with local—decentralization. But I can't figure out, unless you have figured out—I can't figure out from your testimony, unless you have figured out what was wrong with these four centers, how you're going to do it in 50-plus centers.
    That is, the possibilities of non-standardization and lack of information and lack of communication, you know, are multiplied many hundreds of times now. And by the way, your response to why decentralization was good, I assume—I wasn't here at the time—but I would assume that congresspeople on this committee made the same arguments of why you shouldn't go to that process to begin with.
    So apparently a mistake was made and now we're going back to the regional. But given all the—given the problems with four offices just in standardization and communication and in errors, how are you going, by June 1, with one—it sounds like one satellite conference you're going to solve these problems?
    So are these real problems? Were they real problems? And how are you going to correct them so we don't have them again?
    Ms. MOFFITT. The problems you outlined there sound like the very issues that brought Mr. Ross to the decision to review the 11,000 claims.
    Mr. FILNER. Out of how many was that? What's 11,000 represent of percentage of—that you could have reviewed? All, 50 percent, 10 percent—I don't——
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    Ms. MOFFITT. That was—those were all of the cases that had been adjudicated by the four Area Processing Offices. Those were all of the denials.
    Mr. FILNER. So every denial was readjudicated?
    Ms. MOFFITT. Yes. And were redeveloped. A development letter went out to every claimant.
    Mr. FILNER. That's a pretty significant statement, right, that you had to—you have to go back and look at every single one to—because there was a fear of error on those parts? I mean, I'm glad you did it, but it's a very significant admission.
    Ms. MOFFITT. We wanted to make absolutely certain that the issue of lay evidence was being fully developed so that we would be fully considering it in our rating decisions.
    Mr. FILNER. Was that the only thing that you were looking for to redo?
    Ms. MOFFITT. Lay evidence was the primary reason.
    Mr. FILNER. I mean, how about this evidence of continuity that the veterans didn't know about? That is, if they did not place—if the first evidence of the illnesses was more than 2 years afterward, then they would be denied also, right?
    Unless they were asked about evidence of continuity. And if they weren't even asked about it or told that that's what they should do, then they would be denied also, right?
    Ms. MOFFITT. We looked for evidence within 2 years and then continuity requires that it have a duration of at least 6 months or more to be a chronic condition. So based on the regulation at the time, we were looking for the condition within 2 years and that it was chronic.
    Now, of course, with the extension of the presumptive period, we will be looking at all of those cases that we denied for being outside the two year period and readjudicating them again to see if we can't grant based on symptoms being shown outside the presumptive—outside the two year presumptive period.
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    Mr. FILNER. I interrupted you before you got—I mean, I mean, how—all right, so every case that was denied, we—you thought there might be an error. By the way, has that process been completed or how many have been overturned out of that?
    Ms. MOFFITT. We've completed 4,966 cases.
    Mr. FILNER. And how many——
    Ms. MOFFITT. Out of the approximately 11,000.
    Mr. FILNER. No, but how many of those are now—been deemed that——
    Ms. MOFFITT. We granted service connection in an additional 683 cases and granted, for undiagnosed illnesses, in an additional 157 cases.
    Mr. FILNER. So over 3,000 out of the 4,000 are denied again? Is that what you—I don't—am I using the right terminology here?
    Ms. MOFFITT. Remain denied.
    Mr. FILNER. They remain denied?
    Ms. MOFFITT. After readjudication, they remain denied.
    Mr. FILNER. Okay, maybe I'll get back to that. So tell me about all this standardization, communication, and proactivity. How are you solving those problems by June 1 now with these 50 regional centers?
    Ms. MOFFITT. Like I said, we will engage in the satellite broadcast as well as an onsite training.
    Your comments regarding outreach to the veterans as well as communication with them is an important one. In our regional offices, as we move to the reengineered environment, the employees in the regional office already realize the need to have close personal contact with veterans.
    And they are, in many instances, in teams where they do just that: where they have a group of veterans that they take care of, communicate with, and offer the services that should be provided to those veterans.
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    With regard to other outreach efforts, we looked to the service organizations to include information in their magazines, as well as us taking the approach of getting out to the community in public forums, town meetings, and the like with regard to Persian Gulf——
    Mr. FILNER. Who's doing the satellite thing, by the way? Who's actually doing the training by satellite?
    Ms. MOFFITT. That will be provided by the Compensation and Pension Service as well as subject matter experts from——
    Mr. FILNER. If I were you, Ms.—let me just—I mean, you have—we have said that there's a casualness. You know, there's a non-taking seriously, we're angry and frustrated. It seems to me you ought to do something dramatic to deal with this.
    I mean, for example, if the Secretary not just—I mean, did this satellite training with full media treatment of it that the Secretary of your Department at Cabinet level—get the President in on it.
    We take this thing so seriously that we want to make sure that we have the absolute—we're going to tell everyone of the regional people and every person in the staff of the VA that this is a serious issue that we are—and we want people to look at it seriously, understand it, etc.
    And from the very top, this is not just a bureaucratic situation where, you know, somebody—I'll say a faceless administrator in the bureaucracy is doing the training. I want, you know, the Secretary of the VA, and I want the President of the United States to tell your people that this is serious and let them start the training, let them start the—let them understand that from the top, this is a serious matter and we are not going to tolerate casualness.
    We're not going to tolerate lack of understanding. We're not going to tolerate errors of the magnitude that we have seen here. So I mean, I would do something a little out of the ordinary for something as—for which you have been facing a lot of criticism on.
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    Just some advice from someone who has to deal with these issues all the time.
    Mr. QUINN. Thank you, Mr. Filner.
    Do you have any reaction to that?
    Ms. MOFFITT. I'll take your comment back to him—to the Secretary.
    Mr. FILNER. Thank you.
    Mr. QUINN. You wouldn't mind if any of us or staff joined at those satellite sessions would you?
    Ms. MOFFITT. No, sir. No problem.
    Mr. QUINN. Might want to—Bob, that might be an idea too that some of our folks here could join, at least observe to see what's been done out there and maybe have some suggestions and constructive criticism for anything that follows up in June or the following weeks in June.
    Ms. MOFFITT. Okay.
    Mr. QUINN. Thanks.
    Mr. Mascara has joined us this morning. Thanks for being with us. He missed the first round of questioning. So if it's okay with Mr. Reyes, I'll ask Mr. Mascara if he has a question this round?
    Mr. MASCARA. Good. Thank you, Mr. Chairman. I have a statement I'd like placed on the record.
    Mr. QUINN. Without objection, so ordered.
    Mr. MASCARA. Thank you.

    [The prepared statement of Congressman Mascara appears on p. 53.]
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    Mr. MASCARA. My question is the Philadelphia Area Processing Center has consistently reported a significantly lower allowance rate on the Persian Gulf claims concerning undiagnosed illnesses than the Phoenix center.
    Do you know what—and the numbers are—the Phoenix center allowed 297 claims and denied 1,316 claims. The Philadelphia center allowed 100 claims and denied 1,388. Is there some rationale for or some reasoning behind those significant differences?
    Ms. MOFFITT. When I got here in November and looked at many significant issues with regard to Persian Gulf claims, what I chose to attack first with regard to looking at the quality was to ensure the accuracy of the development on these 11,000 claims, as well as to look at the denials to determine if we were improperly denying claims.
    So our reviews up to this point have focused on those two areas. We have now begun to call in cases that include grants of service connection and will now begin to be able to look at the differences in those grant rates and have an idea as to why there is a difference.
    But I do not know that difference today.
    Mr. MASCARA. They have not established why there is that significant difference between those two locations——
    Ms. MOFFITT. Right.
    Mr. MASCARA (continuing). Philadelphia and Phoenix?
    Is there anything that you have seen in the results from ongoing research that would lead you to believe that we can service connect any specific cluster of symptoms exhibited by the Gulf War veterans suffering from undiagnosed illnesses?
    Ms. MOFFITT. Could you rephrase—repeat the question?
    Mr. MASCARA. Well, I guess the question is, is there anything you can point to as a result of service connect clustering of symptoms exhibited by Gulf War veterans?
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    Ms. MOFFITT. If we look at where cases have been granted, they do cluster around particular body systems.
    If you'd give me just a minute.
    I think generally about 50 percent of all PGW claims are granted for musculo-skeletal conditions. There's also a large number due to systemic conditions.
    Hold on.
    About 47 percent of all PGW claims that we have granted have had to do with a musculo-skeletal—joint pain, that sort of thing. Respiratory, as you would expect, for environmental hazards, as well as undiagnosed systemic conditions seem to be the main areas in which we are granting service connection.
    Mr. MASCARA. Okay, I thank you.
    Thank you, Mr. Chairman.
    Mr. QUINN. Thank you, Mr. Mascara.
    Mr. Reyes.
    Mr. REYES. Thank you, Mr. Chairman.
    Ms. Moffitt, based on the comments that you've heard from this panel here this morning, have these observations—have you not heard of the frustration out in the veteran community about these issues before? Is this a complete and total surprise for you this morning?
    Ms. MOFFITT. Oh, no, sir. You know, we have definitely heard of the frustration of the veteran community. I think that's a key reason why the Secretary made the decision he did.
    I happen to have accompanied him on several public forums dealing with Persian Gulf issues, and very definitely we heard the frustration of veterans as well as the veterans' service organizations with regard to these issues.
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    Mr. REYES. Given that, are there any plans to perhaps put together some working groups or advisory groups of veterans? You know, I have found in my experience that oftentimes the solutions to some of these problems come from the very people that are affected.
    Has that been considered by the Secretary or your Department, putting together veterans' advisory committees that could possibly give you some solutions or some recommendations about these very issues that are so demoralizing to the veteran community?
    Ms. MOFFITT. My understanding is that the Secretary does have a Persian Gulf Advisory Board.
    Mr. REYES. Comprised of veterans, affected veterans?
    Ms. MOFFITT. I'm really not sure about that, but I can provide that to you for the record.

    (Subsequently, the Department of Veterans Affairs provided the following information:)

    The VA Persian Gulf Expert Scientific Committee was chartered in late 1993. The purpose of this standing federal advisory committee is to advise the VA Under Secretary for Health and the Chief Public Health and Environmental Hazards Officer on medical findings affecting Persian Gulf veterans and to make recommendations to the Secretary. The Committee consists of 18 members selected on the basis of high professional achievement and expertise in illnesses and research that might be related to Persian Gulf service. Currently, there are 3 representatives from Veterans' Service Organizations who are members of the Committee.

    Mr. REYES. Well, more than anything I would offer that as a recommendation or as a suggestion.
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    Because, you know, in the previous round when I asked you—when I informed you about the frustration that exists out in the veteran community, you said the motto of the VA is ''grant if you can, deny if you must.''
    Surely there is based again—and by your own admission, the frustration that you have heard prior to this morning, surely there's something wrong systemically that where so many veterans feel such a high and intense sense of frustration and, as my colleague Lane Evans mentioned, now escalated to anger.
    Those kinds of issues, at least from my perspective and from the comments that have been made by veterans in my District, are not new. You know, it's something that I guess veterans feel they have had to deal with continuously and for years.
    I offer that again in the context of we need to at least strive to better serve these people that have put their life on the line for this country.
    Ms. MOFFITT. Let me just mention—in our business process reengineering, as we started out, we went to our stakeholders and interviewed them. We interviewed veterans, service organizations, members of Congress, people in the Department of Veterans Affairs and outside.
    In that very issue, the disconnect between what we are trying to do for veterans and how veterans feel about what we actually do do, was a key communication issue, something that has been mentioned by others here today. In the reengineered process, what we expect is that the veteran will be able to talk directly to the decision maker.
    So he wouldn't be calling in to a phone bank that couldn't get access to his record. He may be calling in to a phone center where they could directly connect him with the team that is handling his or her claim.
    And that's that communication that veterans are looking for, that we are engineering into our process so that there will not be that disconnect between what the decision makers are trying to do for veterans and how veterans feel they're being treated.
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    We want those to be mutual in that we respect veterans and we want them to feel respected. We are granting wherever we can, and we want them to understand when we can't grant why it wasn't possible.
    Mr. REYES. And this type of service which, you know, I certainly applaud you for this—striving for this goal, but this type of service is not limited in any way by the lack of staffing that you have mentioned this morning—or shortage of staffing?
    Ms. MOFFITT. The reengineered process, you know, anticipates that there will be reductions in staffing over the next several years.
    And you know, it's not simply what the—how the human resources will do their job, but it includes information technology initiatives that need to be in place so that our decision makers can get online access, for instance, to Veterans' Health Administration records so the decisions can be made online.
    Or a veteran can be saying I was recently treated at a particular private hospital, and us being able to go through an online system and say yes, sir, that hospital record is available to us and we'll be able to make a decision on your claim.
    So there's lots of things that go into it besides just the people knowing how to do their job. It includes, like I said, IT initiatives, telephone systems. It's a very detailed plan that needs to all be brought together to provide this service that we hope to provide.
    Mr. REYES. So then if I understand your question, is that you do anticipate having sufficient staffing so that a veteran in Des Moines will get the same kind of service as in Tampa and Spokane and San Diego and El Paso and all these different areas?
    Ms. MOFFITT. Yes; yes, sir.
    Mr. REYES. Okay.
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    Thank you, Mr. Chairman.
    Mr. QUINN. And Buffalo, right? You're going to mention Buffalo? Okay, thanks.
    Thank you, Mr. Reyes.
    If I may just move for a second. The final question for me has to do with the VA's proposed legislation to limit liability in smoking-related illnesses. That, after all, was part of our agenda and you testified to it earlier in your opening remarks.
    Do you have any kind of estimate on the amount of compensation that will be paid over the 5 years if this bill isn't passed?
    Ms. MOFFITT. I'm going to refer that to Mr. Gardner.
    Mr. QUINN. Could you—I'm just looking for a ball park figure here.
    Mr. GARDNER. We don't have that right now.

    [The information follows:]
    Based on a recent General Counsel decision, it is necessary to revise our estimates. As soon as the revised estimates are available, we will share the information with the subcommittee.

    Mr. QUINN. Could you take a look at that and maybe get it over to us in the next couple of days or a week or so? I'd appreciate that.
    Any further questions for Ms. Moffitt at this time?
    Thanks very much for your answers and your preparation for today. We appreciate it very, very much. And I think we've at least, in summary here, tried to point out our willingness to help on the subcommittee and the full committee.
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    And call on us if you need us. We appreciate it very, very much.
    Ms. MOFFITT. Thank you, sir.
    Mr. QUINN. Thank you.
    The second panel—Mr. Filner made me a little nervous when he asked me what I wanted on my cheeseburger. I think he's going to order lunch out here. Be here all day long.
    Our second panel consists of Mr. Stephen Backhus, Director of Veterans' Affairs and Military Health Care Issues at the GAO. He'll also be accompanied at the table this morning. We appreciate you coming over. Good to see you again.
    We begin always by saying that any and all remarks that you have in the line of testimony will be accepted and submitted for the record. But as we operate under the 5-minute rule, we ask you to keep your opening remarks, if you could, to about 5 minutes.
    Mr. BACKHUS. I think I can do that.
    Mr. QUINN. And we appreciate it. And you may begin, sir.


    Mr. BACKHUS. Okay, it's good to see you again too. Thank you.
    I'd like to introduce, if I could, Cindy—on my left, Cindy Fagnoni, our Associate Director for Veterans' Issues. And on my right, Irene Chu, our Assistant Director.
    Mr. Chairman and members of the subcommittee, we are pleased to be here today to provide our views on the progress and the challenges facing the Veterans Benefits Administration in implementing GPRA.
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    As you know, the Act was passed in 1993 to require agencies to clearly define their missions, set goals, measure performance, and report on their accomplishments. It was designed to focus Federal agencies' attention on the results of the programs they administer, not just the program operations.
    Instead of focusing on the amounts of money they spend or the size of their workloads, agencies are expected to rethink their missions in terms of the results they provide, develop goals based on their results-oriented missions, developed strategies for achieving their goals, and measure actual performance against the goals.
    Perhaps most significantly though, GPRA also requires agencies to consult with Congress in developing their strategic plans. This gives the Congress an opportunity to work with agencies to ensure that their missions and goals are focused on results, are consistent with congressional intent, and are reasonable in light of fiscal constraints.
    GPRA requires VA and other Federal agencies to complete their strategic planning by September 30 of this year, and in the future, submit annual performance plans and reports to OMB and the Congress.
    As you know, VBA's responsible for administering the nonmedical programs of VA that provide financial and other benefits to veterans, their dependents, and survivors.
    As you requested, Mr. Chairman, my statement will focus primarily on VBA's largest business line, the Compensation and Pension Program, which spends about $19 billion dollars annually or about 90 percent of the VBA appropriation.
    The information I have today is based on our past work in the area, our review of the strategic plan, and of course our discussions with VA officials.
    In summary, it's our view that VBA has taken an important first step in implementing GPRA, but the process is an evolving one and many challenges lie ahead.
    VBA has developed a strategic plan with a mission and goals and has begun consulting with Congress, as we understand, as well as other stakeholders, to obtain their views on its plan.
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    For the Comp & Pen Program, VA has identified seven goals that are oriented toward the efficiency of claims processing, customer satisfaction, improving the accuracy rate for paid claims, reducing the time required to process claims, and reducing their cost—their operating cost.
    It has also identified specific performance measures in these areas such as reducing processing time for the original compensation claims from 144 days to 53 days and achieving a 97-percent accuracy rate for claims by fiscal year 2002.
    As the VBA continues its process of implementing GPRA, it faces some difficult challenges, however.
    If the full intent of GPRA is to be achieved, VBA will need to develop a clear mission, goals, and measures—performance measures that are truly results-oriented, not just ones that are process-oriented.
    For example, the purpose of the disability program, the Disability Compensation Program, is to compensate veterans for the average loss in earning capacity in civilian occupations that results from injuries or conditions incurred or aggravated during military service.
    Given this purpose, results-oriented goals would focus on issues such as whether disabled veterans are indeed being compensated for the average loss in earning capacity and whether VBA is providing compensation to all those who should be compensated.
    VBA has not yet tackled these types of difficult questions and will need to do so in consultation with Congress in order to develop a truly results-oriented strategic plan. These are very sensitive issues.
    VBA has told us that they have begun consulting with Congress and other stakeholders about appropriate goals and measures for the Comp & Pen Program. As VBA continues its strategic planning, it will also need to integrate its plans with those of the rest of VA, as well as those other Federal agencies that support veterans' benefits programs.
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    For example, in determining the eligibility of a veteran for disability compensation, VBA usually requires the veteran to undergo a medical exam which is generally performed by the Veterans' Health Administration physicians.
    Similarly, VBA looks to the Department of Defense for information about the medical conditions of veterans while they're in the military and to the Department of Labor for veterans' employment and training experiences. VBA will need to determine what impact these other entities have on their performance.
    In conclusion, Mr. Chairman, VBA is aware that it has much work to do to fully implement GPRA. Its success in implementing the Act will depend on how successful it is in ensuring that its plan focuses on results, integrates with other VA components and other agencies, and that its performance is measured, assessed, and reported.
    Congress plays an important role in consulting with VBA in developing a results-oriented goal and overseeing their efforts.
    This concludes my testimony and I'll be glad, along with my colleagues, to respond to any questions that you or other members of the subcommittee may have.

    [The prepared statement of Mr. Backhus appears on p. 72.]

    Mr. QUINN. Thank you very much, Steve. We appreciate both this testimony and the briefing that Bob and I had some weeks ago. I have no questions at this point.
    Third panel. Our third panel represents several veterans' service organizations. Today we're pleased to have with us Mr. Jim Magill, Legislative Director of the VFW; Mr. Chuck Burns, Service Director of AMVETS; Mr. Matt Puglisi, Assistant Director of the American Legion's VA and Voc Rehab Commission; Mr. Bill Russo, the Director of Veterans' Benefits Programs for the Vietnam Veterans of America; and Mr. Joseph Violante, Deputy Legislative Director for the DAV.
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    Gentlemen, thanks for joining us today. I'll note for the record that our letter of invitation to all of you requested that you submit written comments on Comp & Pen's Results Act testimony so that you would have a chance to review it thoroughly as well as the subcommittee.
    Before you begin, I also want to congratulate the Legion for providing over $600,000 in grants to Persian Gulf veterans and their families. Well done, and we appreciate your assistance a great deal.
    In no particular order, unless you guys have flipped a coin outside, Mr. Violante, how about if we start there and work our way across the table.


    Mr. VIOLANTE. Thank you, Mr. Chairman and members of the subcommittee.
    Since 1920, the Disabled American Veterans has been dedicated to one single purpose—building better lives for disabled veterans and their families. On behalf of the more than one million members of the DAV and its auxiliary, I wish to express our deep appreciation for this opportunity to provide our assessment of the processing of Persian Gulf War veterans' claims.
    Mr. Chairman, the current system of processing these claims at the four regional offices is not working. It's apparent that the current system serves neither Persian Gulf veterans nor the local veterans very well. And I'm happy to hear that the VA is going to be moving towards decentralization of these claims.
    The plight of the Persian Gulf veterans suffering from undiagnosed illnesses continues to be one of our foremost concerns. Recent VA statistics on the claims processing for these veterans only heightens our concerns.
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    Of the 11,806 environmental hazard claims considered, slightly more than 1,600 have been grated service connection; and only 803 have been granted service connection for undiagnosed illnesses.
    The VA has denied almost 10,000 claims for undiagnosed illnesses, and these disallowed claims fall into six categories. And these are that there's a diagnosis; that the illness was not chronic; it was due to other etiology; that it was not manifest on active duty or during the two year presumptive period; it's not shown by the evidence of record; and that, although it was undiagnosed, it wasn't to a compensable degree.
    It was announced this morning that the VA will be reviewing only category four, and that's not manifest on active duty or within the two year period. However, it makes sense not only to review all of these categories, but to provide the veteran with an opportunity to present additional evidence to support a claim which is not in the claims folder.
    And I'm not quite sure of the VA's rationale of only going with category four because, if I could, I'd like to discuss these other categories. If the illness was not chronic during that two year period, there's nothing to say that that illness is not chronic today. And I don't understand why the VA's not reviewing those.
    Again, the same thing is true if it was not shown by the record during that two year period, who's to say that today it wouldn't demonstrate that this veteran is now suffering from an undiagnosed disability at a compensable level. And the same with the fact that it wasn't compensable at the time during that two year period.
    All those categories certainly should be reviewed. With regards to category three, I'm somewhat concerned and confused. According to the VA, this category includes a condition that's undiagnosed and became manifested to a compensable degree but has an intercurrent cause or is due to the willful misconduct or alcohol or drug abuse.
    I'm not a doctor nor am I an expert on undiagnosed illnesses, but I don't understand how you can say that you don't know what this person is suffering from, but you do know what has caused it. And I believe that what we're seeing here is something very akin to what our concerns are with regards to the smoking regulations.
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    And you know, the VA hangs their hat on the fact that this veteran may be abusing alcohol or may be abusing drugs. And the same is going to hold true with regards to smoking. It's a convenient way to deny a claim just because one of these elements are involved.
    One of the frustrating aspects of dealing with Gulf War Illness is the medical community's desire to provide a diagnosis for these veterans' illnesses. Physicians are trained to provide a diagnosis. In other words, to pigeon hole the problem with their best guess. And that's category one, where there's a diagnosed illness.
    Again, we believe that these should be reviewed for the same reasons. These need to be looked at now to determine whether or not those diagnoses were proper at the time and whether this veteran now has these symptoms considered to be Persian Gulf Illness.
    Finally, adjudicating Persian Gulf War claims at the four regional offices has adversely impacted upon the adjudication of the local veterans' claims. These claims are being transferred out to other offices. It's creating a logistic nightmare for our service officers to keep tabs on their local veterans' claims.
    Again, I think the VA's movement to decentralize will certainly take care of that problem.
    The DAV supports the decentralization of the Persian Gulf claims and we're pleased to see that the VA will be focusing on a nationwide training program for its rating specialists and adjudicators to provide them with the expertise that will be needed to adjudicate these claims.
    Like you, Mr. Chairman, if it's possible, I'm sure DAV would like to have its people present to monitor these training sessions.
    That concludes my statement and I'd be pleased to answer any questions.

    [The prepared statement of Mr. Violante, w/attachment, appears on p. 78.]
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    Mr. QUINN. Thanks. We'll make that request for you to see if you could join or anyone else who is interested during those training sessions on behalf of all the VSO's. And Michael or somebody from the office will get back to you later.
    Mr. VIOLANTE. Thank you.
    Mr. QUINN. Mr. Puglisi.


    Mr. PUGLISI. Thank you, Mr. Chairman. And good morning to you and distinguished members of the subcommittee. And the American Legion appreciates the opportunity to offer testimony today regarding the processing of Persian Gulf War claims by the Department of Veterans Affairs.
    We commend you, Mr. Chairman, for convening this hearing. The topic of Persian Gulf claims has received little media attention, but it's an important issue that lies at the heart of how the Federal Government aids disabled veterans of the Gulf War.
    This hearing comes in the midst of a massive review of Gulf War undiagnosed illness claims by VA because of earlier widespread processing errors and the recent extension of the presumptive period.
    This review and the extension of the presumptive period, although welcome by the American Legion, both exacerbate the inherent flaw of Gulf War environmental hazards processing system, of which undiagnosed illness claims are a major subset.
    And that's the centralized processing of these claims which we just found out today will no longer be occurring. But the centralized processing has left us a legacy that we'll be dealing with for many months, if not years, and that's 14,000 claims are currently pending in that system.
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    That's a backlog, and that signals 14,000 disabled veterans who have been waiting to hear from VA concerning their claims. When VA initiated their plan to centralize Persian Gulf claims, the American Legion adamantly opposed this effort because of the possibility it would create such a backlog.
    The American Legion has consistently encouraged VA to immediately end the practice of centralized processing and we therefore welcome Ms. Moffitt's announcement earlier this morning. And we are convinced that it signals better future service for disabled Gulf War veterans.
    An environmental hazard claim is one where the veteran's current disability may have been caused by exposure to an environmental hazard in the Southwest Asia theater of operations. An undiagnosed illness claim is one where the signs and symptoms of illness reported by the veteran go undiagnosed by a VA medical doctor.
    Undiagnosed illness claims are a subset of environmental hazard cases. And approximately 90 percent of environmental hazard cases involve an undiagnosed illness. As of March 1997, the vast majority, 83 percent, of Gulf War disability claims have not involved an environmental hazard as a possible cause of the veteran's disability.
    Most of the claims filed by Gulf War veterans, therefore, are adjudicated at VA regional offices that have jurisdiction for specific geographic areas in the U.S. or overseas.
    In 1995, investigations conducted by the Department of Veterans Affairs, the U.S. General Accounting Office, and the American Legion's Gulf War Task Force found widespread errors in the processing of Gulf War undiagnosed illness claims.
    And just as a note in reaction to some testimony given earlier this morning by Ms. Moffitt, out of the four Area Processing Offices in our investigation, and we made site visits to all four, the Phoenix Area Processing Office was clearly more better prepared to handle these claims.
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    The staff received extensive training. The allowance rate was sometimes three or four times greater than the other APO's. And the atmosphere within the Phoenix Area Processing Office was geared towards helping Gulf War veterans as much as possible.
    That wasn't the case in the other places. So if VA wants to see how to do this right when it decentralizes these claims, we strongly recommend that they look at how the Phoenix regional office and its director ran that program.
    VA undertook a review of the over 11,000 claims that had been adjudicated as of July 1996 in response to the findings and recommendations of those investigations. VA is currently seeking evidence from the veterans who filed these claims and will reconsider them if necessary.
    The American Legion commends VA for initiating this massive review.
    The recent extension of the presumptive period automatically added over 5,000 undiagnosed illness claims initially denied service connection because the symptoms reported by the veterans who filed those claims fell outside the original 2-year presumptive period.
    Although welcomed by the American Legion, this increases the backlog of environmental hazards claims to over 14,000 cases. The American Legion believes the remedy to the backlog lies in ending the centralized processing of these claims, and apparently VA does as well.
    In conclusion, Mr. Chairman, although long overdue, the decision to end adjudication of Gulf War environmental hazards claims at Area Processing Offices is a win for Gulf War veterans and a win for VA employees.
    At town home meetings recently conducted by the Special Assistance for Gulf War Illnesses at the Department of Defense, Gulf War veterans, during the question and answer period, were encouraged to ask any questions or provide any comments that were at the top of their minds.
    Nine times out of ten, these folks weren't talking about DOD's investigation, chemical weapons, ''Sixty Minutes'', whistles and bells, and things like that. They were talking about basic bread and butter things. How am I going to pay my bills? Who's going to take care of me? Am I eligible for health care?
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    Claims were number one on veterans' minds, and the fact that they had filed for compensation and hadn't heard from VA sometimes for months or years. This step that VA took today is only a first step. And this hearing, I believe, was the spark that caused VA to change the way it processed these claims.
    And you deserve all the credit for that, Mr. Chairman.
    That concludes my testimony and I'll be happy to answer any questions.

    [The prepared statement of Mr. Puglisi appears on p. 85.]

    Mr. QUINN. Thank you very much. Mr. Russo.


    Mr. RUSSO. Yes, Mr. Chairman and members of the subcommittee, Vietnam Veterans of America appreciates this opportunity to present our views on Persian Gulf claims and cigarette smoking related claims.
    VVA strongly supports the VA's decision to relocate these Persian Gulf claims into the regional offices and we think it's long overdue. It's been mentioned by several of the members of the subcommittee this morning that it appears some Area Processing Offices have been granting claims at a higher rate.
    And I've analyzed the statistics provided by VA current through March, and they're quite staggering. The western area office where Mr. Puglisi says the only actual training was done of the staff is granting 20 percent of the undiagnosed illness claims. The other offices are granting 5 percent and 7 percent.
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    So it appears that where the training has been done, the claims are being granted in a much more—much higher rate. There's been lots of evidence for the last several years that VA needs to do better training.
    Our organization discovered a form letter a year and a half ago coming out of the Philadelphia Area Processing Office denying a Persian Gulf vet's claim for benefits that completely misstated the law on Persian Gulf benefits and used that misstatement to deny the guy's claim.
    Now it so happens that we brought this case, this one isolated case, to the attention of VA and they fixed that one problem. But the fact that there's an erroneous form letter going out that completely misstates the law is very troublesome and it indicates that VA needs to train its staff as to what the law is before they can be expected to know how to apply the law in individual cases.
    Lastly, we think that moving these cases back into regional offices will improve the processing of Persian Gulf claims for one important reason. The veterans' service organizations and their representatives act as a system of checks and balances on the VA.
    And when these veteran service officers can do effective advocacy in individual claims by looking through the claims folder, by talking to the actual VA adjudicator who's going to decide the claim, they can bring mistakes to the attention of the VA staff on a day to day basis.
    And that system of checks and balances is crucial to making the VA function well. Regarding cigarette smoking claims, VVA strongly opposed the proposed legislation to effectively bar cigarette smoking-related claims for compensation for the following reasons:
    First, it's our position that the military encouraged cigarette smoking for years and years. As we stated and were quoted in the Wall Street Journal 2 weeks ago, ''The Military gave free cigarettes to service members for decade and also subsidized GI's purchase of them at the commissaries.''
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    There were often no health warning labels on these cigarettes in contrast to commercially available packs. Moreover, the military often sat aside a time and a place specifically for smoking; thus encouraging a culture in the military of ''smoke 'em if you got 'em.'' And this encouragement by the military to smoke was specifically referenced by the VA General Counsel in its precedent opinion 2–93.
    Secondly, the Clinton administration has consistently asserted that cigarette smoking is addictive, and that's in direct conflict, we believe, with the statements by Secretary Brown over the last several weeks including that quoted in the Washington Post that cigarette smoking ailments are the result of veterans' personal choice to engage in cigarette smoking.
    If you accept that cigarettes are addictive, as the administration has said over and over, then it really isn't a matter of personal choice for them to have smoked.
    Finally, regarding these cigarette claims, we don't expect a flood of these cases to come in to the VA under the current law. The fact is, the current law has been on the books for some time, and we have only 4,000 claims held in abeyance.
    Most veterans are unable, we find, to get direct medical evidence of technical medical issues. And in these cases, a veteran would have to come in with medical proof from a doctor that his cigarette smoking in service or his addiction thereto was the cause of the cancer or whatever smoking-related ailment he's got as opposed to the 10 or 20 years of smoking the veteran did after service.
    So we don't anticipate that VA will be forced to grant a large number of these claims. And we think it would be unfair to single out one particular group of veterans and say that their claims are barred.
    Thank you.

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    [The prepared statement of Mr. Russo, w/attachment, appears on p. 89.]

    Mr. QUINN. Thank you very much. Mr. Magill.


    Mr. MAGILL. Thank you. I would probably like now to be very brief in my comments. I can only echo what my colleagues have said at the table. What I would like to do is, with the remainder of my time, have Mr. John Muckelbauer of our staff who has dealt with the Persian Gulf Illness for quite some time to have comments on the previous testimony that we've heard.
    The VFW certainly does support bringing the claims back to the regional offices. And what I would like to comment on is the outreach that we've not heard too much about. We believe the VA has made some great strides over the years in the way it reaches out to the veteran population.
    But we have been hearing reports that the vast majority of the Persian Gulf veterans really do not know where to go to get the information. The VFW has conducted its own registry, and we have supplied that information to the VA.
    We just can't stress enough that if we want to help these veterans, they have got to know where to go to get the help. At this point, I would ask, John, if you would like to make comments.

    [The prepared statement of Mr. Magill appears on p. 94.]
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    Mr. QUINN. By all means. And I apologize for not introducing you with the rest of the panel, John, but please feel at home to comment with the time that remains from your colleague sitting next to you there.
    Mr. MUCKELBAUER. Thank you, sir. And just to echo a couple of items from Jim, the VFW is encouraged by some of the VA's recent initiatives on this matter, particularly as it involves the extension of the presumptive period to a total of 10 years now and for the—finally the decentralization of the Gulf War claims back to the regional offices from the APO's.
    We feel these two initiatives will go a long way to address the needs of the Gulf War issue, but it's not the final answer. There are still ways—issues that need to be improved; primarily I would say the adequacy of the exams.
    It was addressed earlier by Mr. Mascara the clustering of symptoms. And I don't think that that issue was fully explored. It is a fact that a lot of the Gulf War veterans are exhibiting clusters of symptoms. And the problem, as addressed by some of my colleagues, is that some of these symptoms are being diagnosed, some of them are not.
    Most often, it appears that they're not looked at collectively in rendering a decision as far as compensation is concerned. And I would submit that that has largely to do with the fact that the—on examinations, the doctors are not giving a determination as to the etiology or the cause of these symptoms.
    That's in the regulations. The examining physician should make that decision, what's the cause of these symptoms in their opinion. If they were simply to do that, that would again go a long way to address these concerns.
    Outreach efforts—certainly those could be extended. The fact is, there is a lot of information about the Gulf War Illness, but we simply deal with too many veterans who do not know where to turn to get that information. I mean, there's Web sites, there's 800 numbers, there's bulletins.
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    But for the vast majority of the veterans that do not have access to it, we can't reach them and we need to address those issues.
    Mr. QUINN. May I interrupt for just one second?
    Do you have a suggestion on how we could do that better?
    Mr. MUCKELBAUER. I would say more advertising in perhaps the national newspapers, perhaps public service announcements, more frequent public service announcements, things along those lines. Additionally, the Gulf War forums that we've held recently do go a long way in continuing that.
    But finally, I would just like to add that one thing as far as lessons learned is that we should encourage the VA to listen to the veterans. It's now 6 years after the Gulf War and these regulations still are not ironed out.
    And Mr. Chairman, I want to thank you for addressing this issue. It's not something that gets the glitz of a Khamisiyah or biological chemical exposure or the allegations of cover up. But to the veterans affected by this, it's clearly the most important.
    And thank you for that.
    Mr. QUINN. Thank you very much. Mr. Burns.


    Mr. BURNS. I do appreciate the opportunity to present our views. I am—fear I'm going to be the lone voice crying in the wilderness here this morning regarding I guess last night's decision by the Secretary to return these claims to the regional office.
    AMVETS' opposition to returning them to regional offices is based solely on the fact that the expertise for processing these claims lies in the APO's. These APO's have had over 2 years of experience and expertise in putting these claims together and developing these claims.
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    It's my understanding in talking to the representatives at the four APO's that the backlog has not so much been generated by a lack of expertise or a lack of adequate training.
    Much of the backlog can be laid directly at the feet of VA and the fact that, since these claims started being processed, they've sent out three new development letters telling the officers how to develop these claims resulting in the fact that each claim has to be redone again.
    We have 56 rating specialists now around the country handling these claims. At the APO's, if the best trained VA personnel right now—if we are wound up with 11,000 claims being readjudicated, what is going to happen when these claims go back to the RO level?
    I simply don't think that, as Ms. Moffitt indicated this morning, that 2 to 3—or 2 days of training via satellite or over a conference call is going to replace the 2 years of experience that's been gained at the Area Processing Offices.
    It defies logic to assume that. I know in talking to the Phoenix office the comment that was made to our—to the AMVETS representative in Phoenix by the VA regional director out there was ''God help your claimants.''
    Again, it's the AMVETS' position that the locality of the claim, while it's probably comforting to the claimant to have it close at hand, the veteran should get the best adjudication of his claim possible no matter where that adjudication takes place.
    We simply cannot transfer the expertise and experience gained over the last several years back to the regional offices in a two day training session. We believe if VA would reallocate its resources, put more people in the Area Processing Offices, this backlog could be diminished.
    To get to the smoking issue, while I haven't seen the proposed legislation the VA has—I don't know if anybody has seen it—I have a great deal of trouble with Ms. Moffitt's statement this morning that virtually equated smoking while on active duty with alcohol and drug abuse.
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    I am very troubled by that, not just because I am a smoker, but it seems like to me that VA is setting up a preemptive strike on proper processing of these claims. As has been mentioned by a couple of my colleagues here, cigarette smoking was fairly well encouraged when I was in the service.
    We got free cigarettes in boot camp. I remember at Paris Island we had smoking circles. And for guys that had never smoked, it was a great excuse to get outside and not have to clean a rifle or shine boots.
    The sea rations had been mentioned. VA also either furnished cigarettes for free or greatly discounted prices at their hospitals and the commissaries. We think, as part of my written testimony—which I'm sure if any of you have read, you probably thought I was smoking something else when I talked about this—perhaps VA and DOD should look to the private sector for funding sources for these claims since the tobacco companies are presently in negotiations with the several states to satisfy the claims.
    Why shouldn't VA and DOD pursue this course using every legal means necessary to have the tobacco companies set up a trust fund to be administered by a third party to satisfy these claims? In essence, DOD and VA were acting as agents of the tobacco companies in distributing these cigarettes to active duty military personnel.
    If they're going to be held liable to—if VA's going to be held liable to pay these claims, they should at least examine the possibilities of going to the tobacco companies and seeking their assistance in paying for these claims.
    Mr. Chairman, that concludes my remarks. We appreciate again the opportunity to testify this morning.

    [The prepared statement of Mr. Burns appears on p. 96.]

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    Mr. QUINN. Well, thank you very much, Mr. Burns. And you're in a great spot in case you get paged again. You can get out that door very quickly and no one will get in your way. Thanks for being with us.
    Thank you all for your time today. And Mr. Puglisi, you mentioned the hearing scheduled today. We're not sure if it nudged the VA to make that decision last night or not. But certainly it doesn't hurt to have these scheduled and the content of what we're talking about well known because that's how some of these decisions are made many times.
    And thank you for your kind words.
    I want to get back to the question that Mr. Mascara raised earlier and at least—I think Mr. Russo, Mr. Puglisi, and others may have mentioned it this morning about the difference between allowance rates at the western—the Phoenix APO compared to the others.
    And I think you began to talk about it, but we of course limited your time here this morning.
    Mr. Puglisi, you seemed to point out that you thought one of the reasons for the differences was that Phoenix, the western APO, received a lot more training. And you suggested further that if we're going to do training, that's the model that we should use.
    I want to give you a couple of minutes now maybe to expand on that. Is it the fact that they're—do we know the difference between the training? And then I have a question of why it didn't take place at the other three sites, of course.
    And Mr. Burns, in arguing his side of that matter, says that it's not going to be done and that's why all of us were concerned this morning as to when it's going to take place, when it's going to be finished. A couple hours on TV and the satellite makes me anxious, I know that much.
    Could you comment for a couple of minutes on the success, if that's what it is, out in Phoenix and what we might learn from that?
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    Mr. PUGLISI. Yes, sir. There were a couple of things occurring in Phoenix that I think led to more success in Phoenix than perhaps the other Area Processing Offices.
    Let me tell you what I know and what I don't know. What I do know is that the American Legion made site visits last spring in 1996 to all four Area Processing Offices.
    We spent several days in each place where we reviewed a representative sample of claims that we had power of attorney for and looked for errors in adjudication, looked for errors in development—looked for good things as well, things that were going right.
    And we also spoke with the adjudicating officer, the director of the regional office, and all the key players there to get a feel for how things were going at that APO.
    Phoenix stood head and shoulders above the APO's for a number of reasons. At that time, only at the Phoenix APO had staff been trained. And as a matter of fact, they had been sent here, to Washington, DC, to the VA Central Office.
    And our understanding was that Central Office offered training to the APO's, and the Phoenix director was the only one who took advantage of that training at that time.
    Mr. QUINN. Excuse me. Why don't we make that training mandatory?
    Mr. PUGLISI. That's up to VA. But that seems like that should have been done. Now since last spring, that training may have occurred, but we're not aware that it has occurred. So to be fair to VA, they may have trained these folks since then, but we're not aware that that training took place.
    Another key factor of Phoenix is something that you can't really mandate, and that is the quality and the attitude of the director of the regional office. The director of the regional office at Phoenix had created a real positive atmosphere within the office.
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    The folks who were adjudicating Gulf War undiagnosed illness claims had a real positive attitude about the claims. They were getting the backing of their boss. He had ensured that they had gotten training. He was encouraging them to do the best job they could.
    And the allowance rate at that time was 11 percent and has grown since then. That wasn't the case at the other APO's. We got the clear impression that—again, you can't really quantify this, but we got the impression that this was a real hassle.
    You know, we've been cursed now with Gulf War undiagnosed illness claims at the APO. We might as well be declared a leper. And it's preventing us from doing other work that we have. And as a result, a thousand claims were sent from Nashville to Muskogee, OK and some other claims were sent from some of the other APO's, to Cleveland, Ohio, because of the backlog.
    Mr. QUINN. Thanks.
    Mr. Russo, a minute or two to respond.
    Mr. RUSSO. Yes, I don't have too much to add to what Mr. Puglisi has said, but I think what occurs when you hand a VA adjudicator a claims file with no training and perhaps the only guidance he has is some VA manual provisions or the actual regulation itself——
    Mr. QUINN. Or a form letter.
    Mr. RUSSO (continuing). Or a form letter, they come up with results that are just going to be completely wrong.
    And the fact that—moreover, the fact that there was no supervision of these claims that allowed the erroneous form letters to go out, that allowed claims to be incorrectly decided—and I think by Ms. Moffitt's own statistics she gave you, the rereview has shown a 10-percent error rate just so far.
    I think that's reprehensible and that specific, specialized training ought to be mandatory as you said, Mr. Chairman, any time a new type of VA benefit is provided to veterans, as was the case with Persian Gulf veterans.
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    Mr. QUINN. Thanks very much. I'll yield to Mr. Filner. But before I do that, just for one second, I'd like to introduce Congressman Rodriguez who joins us this morning. He's not a member of the committee yet, but we're thrilled to have you.
    He's taken Frank Tejeda's seat here in the Congress and we're very excited about your interest in the committee and being with us this morning. And if you feel like you want to join with any questions, just give me a wave. We'd love to have you.
    Also, Mr. Burns, a quick response about the VA's legislation on the smoking. We have a copy here. And when we're finished, if you all want to stop by, we called over and made some copies, you can pick them up and take them with you.
    Mr. Filner.
    Mr. FILNER. Thank you. I thought it exceedingly clever of you, Mr. Chairman, to take Congressman Rodriguez and put him on the majority side. (Laughter.)
    Get him over to the wrong party before he even starts here.
    So Mr. Rodriguez, we, at a future time, invite you to join us on our side of the table. (Laughter.)
    But he's—you've got to watch this guy. Quinn is clever, I just say.
    Just very briefly—by the way, Mr. Burns, I thought your statement on the liability issue and using some creative technique—I would suggest, Mr. Quinn, that you and I send a letter to the Attorney General whoever is negotiating this stuff with the—I was going to say oil companies—the tobacco companies that we make this suggestion and get it on the table anyway.
    I mean, we should not let them resolve that liability without getting our claim in also. So maybe we can get that onto the table.
    Mr. BACKHUS. Just please don't give the tobacco companies my home address. (Laughter.)
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    Mr. FILNER. They're probably waiting outside now for both of us. I just briefly—you all heard the testimony of Ms. Moffitt. I was just—I mean, do you have confidence that they take—they have understood these problems and are going to act on them?
    I think the error rate, by the way—it looked like higher to me of the—than 10 percent, which—I mean, and I'm not even sure that if you looked at them again there wouldn't even be more. It just sounds still that based on just anecdotal evidence that I have through my own constituents and letters that I get, that I would suspect that there ought to be an even higher turn around on some of these things.
    But as you say and as I said earlier, to examine every one of them and then find 10 to 20 percent error is—it's just amazing to me. But anyway, are you confident—or what should we be watching as they go through this and try to correct for the past mistakes?
    I mean, are you confident they're on the right track now or what should we be watching?
    Anybody to——
    Mr. PUGLISI. Well, sir, these hearings and oversight, congressional oversight, is a key part of helping VA stay on the right track. The VSO's, all of us, have service officers at the VA regional offices because we're congressionally chartered. So we're keeping an eye on things down at the grass roots level as you all do as well because of what you hear from your constituents.
    But the VSO's have complained loudly and consistently about the APO's, and they didn't go away until late last night because today there was a hearing scheduled. I'm convinced of that and will be.
    So regular oversight, staff meeting with VA, and hearings perhaps every once in a while, the ongoing GAO report, those are the only ways that the complaints that we have are validated about how VA does things. So that's my suggestion is maintaining the interest and this subcommittee and Congress is going to keep VA on the straight and narrow.
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    Mr. VIOLANTE. Mr. Filner, one of the things from DAV's perspective that would probably be helpful would be some form of accountability. When you identify an individual or regional office where there's a high error rate, you know, that needs to be looked at closely.
    And one of the things we don't have is accountability. The VA has been able, over the years, to avoid that. Hopefully with GPRA and their business plan, there will be some accountability built into the system and some way to correct the problem areas.
    Mr. FILNER. I assume there's still people from the VA here. I would like to get an analysis of those errors that were now admitted to by office or something. I think it's absolutely crucial that we don't just lose all this stuff of accountability and statistics.
    I mean, if all those—if 800 or what, 900 or 1,000 errors, and they all came from one office, that would tell us something. That's probably not the way it was, but the distribution of claim allowances shows a significant variance.
    So I hope we can get—we'll ask Ms. Moffitt formally. But if you'd let her know that that question is coming, that that analysis ought to be given to us too.
    I'm sorry I interrupted.
    Mr. MUCKELBAUER. If I may add—as far as correcting the issue, it seems that small aspects of the Persian Gulf Illness issue are being corrected, but only slowly and piecemeal. I think an example is the extension of the presumptive period.
    That has been a significant and arbitrary obstacle in the consideration of Gulf War Illness claims. Now the VA is saying okay, we're going to look at just those claims that were denied because of that coding for symptoms outside of the presumptive period.
    I agree with my colleague from DAV, Mr. Violante, that you have to look at the entire picture. Once again, you have essentially a change of the regulations. You may have claims that were considered that are not going to be—that should be—that will be affected by this change and that do not come under the—under that particular coding.
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    Just I think it's time for the VA to take a step back and put all of the changes into place now rather than basically do it again. Say okay, we have made some errors; now let's correct them all now and move on.
    Mr. QUINN. Thank you.
    Mr. Reyes and then Mr. Mascara.
    Mr. REYES. Thank you, Mr. Chairman.
    I don't actually have a question. I just want to, for the record, to note that all of these organizations have been a vital component in getting us the information for us to ask the questions to the VA about the many issues that affect our veterans. And I just wanted to compliment all the organizations for the great job you've done. Thank you very much.
    Mr. QUINN. Thank you, Mr. Reyes.
    Mr. Mascara.
    Mr. MASCARA. Yes, thank you, Mr. Chairman.
    I want to go back to a question I would have had to the first panel and maybe perhaps you can shed some light on it. That question would have been the VBA is recommending decentralization because of workload problems at the APO's.
    However, that leads you to believe that the RO's, who have workload problems of their own, are better able to handle the demands of these claims. Do we need more claims processing and adjudication personnel at the APO's or the RO's to meet the workload?
    I go back to what Mr. Violante said about the 14,000 claims that are pending. Anybody want to comment on the personnel structure? Is there a sufficient number of employees to handle these claims or not?
    Mr. VIOLANTE. I think the simple answer to that is there is not. And under the current administration's proposed budget, they're looking to cut additional—I think up to 100 people from VBA, so that's a real concern.
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    It doesn't look like there's any hope in the future for getting this situation straightened out.
    Mr. MASCARA. So we're not going to resolve the problem, whether it's the APO's, the RO's, or whatever it is. If we don't have the personnel to handle the claims, we're always going to have a huge backlog of claims. Is that what you're saying?
    Mr. VIOLANTE. Yes, sir.
    Mr. MASCARA. And I want to go off in another direction. So we've established that there's an insufficient amount of personnel to handle the claims. I mean, I'd like to cut to the chase.
    I'm an accountant by trade and very structured, so all that other nonsense we can talk about; but if you don't have the people to process, they're not going to be processed.
    The other is, and that really disturbs me, and I don't know whether it was Mr. Puglisi or Mr. Violante—a lot of names here, Russo, familiar to my ethnic background—is that in response to the question of why Phoenix did so much better than Philadelphia, which was a question of mine, is that somehow I heard somebody say that perhaps Phoenix did better because they had a director who was sensitive to the problems rather than directors at the other RO's who were not.
    I mean, do you—are we to believe then that somehow these people were insensitive at the other RO's and that's the reason that Phoenix did much better than Philadelphia?
    Mr. PUGLISI. Well, Congressman, I had actually made that observation based on a site visit—site visits to all the APO's. And I wasn't trying to suggest that folks were insensitive to the claims, but the director at the Phoenix regional office was very aware of the duties he had as now it being an Area Processing Office.
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    And he let the employees who were adjudicating the claims know that they had his support. They also just adjudicated those claims. It was a team, and all they were going to do was Gulf War environmental hazard claims, and that didn't occur at the other APO's.
    Folks were given Gulf War claims, and other claims, and told: ''just get to work, people.'' That was the attitude at the other places.
    And just to comment on insufficient personnel, when you break up all these claims across all the regional offices across the country, in some states, there were very few Gulf War veterans who filed environmental hazards claims. In some states, just dozens.
    So in Maine, for instance, they should only get several dozen extra claims for them to adjudicate. It shouldn't be a big deal for those folks in Maine. In North Carolina, in Alabama, in Georgia, those regional offices are going to get quite a few more—hundreds and very likely thousands more claims perhaps per regional office.
    So VA should be smart in assessing what its needs are as far as full time employees or more full time employees. Every regional office isn't going to need more employees to adjudicate these claims. But some will.
    Mr. MASCARA. Well, you're being very kind to the area offices by saying that the attitude was not a problem. Phoenix did much better because they had a director who was sensitive to the issues and set the stage for proper fairness and equity in adjudication.
    Where the other three directors did—were not sensitive. But you're saying that that's not the case, and I say it is.
    Mr. PUGLISI. Well, no, sir. I must not be making myself clear. There were problems at all four Area Processing Offices. There were gross errors at all four. There were just fewer errors in Phoenix. And one of the explanations perhaps can be the way the director ran that regional office.
    Mr. MASCARA. Well, they did—I mean the claims are much greater there—the approval rates are much greater there than they were in the other three offices.
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    Mr. PUGLISI. Clearly.
    Mr. MASCARA. And there's no standardization of training in these offices?
    Mr. PUGLISI. Not that I'm aware of.
    Mr. MASCARA. What it looks like then is we have a more—more of an opportunity here to be in error in all of the other regional offices if these people aren't going to be trained and a certain standard set.
    I think, you know, we need to educate these people about what we're doing here rather than just leaving it up to their own devices as to how they should engage with the people that work for them whether or not a claim should be approved or not approved.
    So I'm saying we need training across the board here. And maybe some of the directors need to be trained more thoroughly than some of the people that work for them.
    Thank you, Mr. Chairman.
    Mr. FILNER. Can I just follow up, Mr. Mascara, on just one point?
    We didn't get an answer on this from Ms. Moffitt, I don't think. But at these area processing centers, were there additional personnel added to handle this or were they supposed to do it out of their own existing staff?
    And as you said, at one of them, they set up a team just for the Persian Gulf War. But at the others, they didn't. So nobody was added at these—if you're designated as an area processing center, it would seem to me you should have had—they should have put additional resources to do that.
    Mr. PUGLISI. I'm not aware that that occurred, Congressman. From the explanations that we received from VA, all the VSO's that—the Area Processing Offices were selected according to their workload. So they tried to pick four places that didn't have the kind of workload that some of the other stations did.
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    I don't know if any personnel were added. It wasn't apparent when we visited those sites that they were.
    Mr. FILNER. I mean, it's just no wonder that it wouldn't work. But I mean, if you're going to designate an area site, you assume that you have a well trained specialist group of people who are assigned to do that.
    And I mean, the more I learn about this, the more I get angry at how it's designed for failure and it just shows not a very deep understanding of the problem at all. And therefore, what confidence are we going to have that when they just switch because they got criticized, now they're going to move to the other.
    It's just disheartening, to say the least, to observe that. I would hope, by the way, that our oversight, as it were—and you have to get apparently into the nitty-gritty. I mean, if we are there at the—if we're watching the satellite training and we—I know from an office of just eight people here or 16 people or whatever that training has to be sustained and continuous and redone.
    And I mean, new people come on. All the people forget some of the details. Somebody was sick that day, whatever. It's a constant process. And in a major organization, they'd got to keep doing it. And I guess we have to keep seeing what they're doing about that because if nobody has the information to even tell the veteran what evidence they need and how to present it, something's going wrong here.
    So I appreciate, as Mr. Reyes said, your ongoing—you have the sustained oversight to help us do that job. Thank you.
    Mr. QUINN. Thank you, Bob. And I think that we will join you as the year goes on in conducting possibly further hearings in an oversight role to make certain that when this June deadline comes and goes, there is some kind of continuation there not only for us to be present and we've invited—on our own, we've invited some others to go this morning.
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    But that is exactly what happens. So I'm suspecting that later on this year we'll be back talking about the Persian Gulf War veterans and the claims. Not so much as you said, Mr. Puglisi, the glitz and all the rest of those things, but the nuts and bolts, the bread and butter of what gets out to our veterans and their families out in the country.
    So we'll be in touch with you I'm sure some more. I don't have any further questions. And I think the subcommittee is clear on their questions. We thank you all for coming today and for your input, and we appreciate, as always, your willingness to help.
    Thank you. The hearing is adjourned.
    [Whereupon, at 10:50 a.m., the subcommittee was adjourned.]